FOR OUR VALUED CLIENTS

COVID-19 and your taxes

This past year began with the most sweeping changes to retirement legislation since 2006 through the Tax Acts of 2019. Then the pandemic hit. In response to the COVID-19 pandemic, there has been, and continues to be, extensive legislation relating to taxes and economic relief for businesses and individuals. Since this is constantly evolving, you should verify all information by accessing the IRS and Treasury websites for up-to-date changes.

CONSOLIDATED APPROPRIATIONS ACT OF 2021

The President signed into law the Consolidated Appropriations Act of 2021 (CAA). The following are the highlights of the CAA:

INDIVIDUAL PROVISIONS

  • New stimulus payments

Similar to the Economic Stimulus Payments received under the CARES Act in March, this new Act provides for a smaller, more restricted stimulus payment for individuals. Each adult will receive only half of the amount allowed previously, however, qualifying children will now receive the same as adults. The maximum phase-out range decreases from $99,000 previously to $85,000 now for single filers ($198,000 previously to $174,000 now for married joint filers). [See chart below.] This payment is based solely on your 2019 adjusted gross income (AGI).

Single  Married 
 AGI  Your check  AGI  Your check
 Up to $75,000  $ 600   Up to $150,000  $1,200
 $77,000  $ 500  $154,000  $1,000
 $79,000  $ 400  $158,000  $   800    
 $81,000  $ 300  $162,000  $   600
 $83,000  $ 200    $166,000  $   400
 $85,000  $ 100  $170,000  $   200
 $87,000 or more  $     0      $174,000  $       0   

    • As AGI increases, payments are decreased by $5 per additional $100 of income (see example above) or go to Second Stimulus Check Calculator 2020 (kiplinger.com).
    • Payments being made through January 15, 2021. Direct deposits made if detail was provided on filed returns; otherwise, checks or debit cards will be mailed starting Wednesday.
    • To check payment status go to https://www.irs.gov/coronavirus/get-my-payment.
    • Stimulus checks are NOT taxable.
    • If you do not get a check but qualify later, you will receive a credit amount on your 2020 tax return.
    • No repayments if the stimulus check exceeds credit amount on the 2020 return.

More...

Families First Coronavirus Response Act

On March 18, 2020, the Families First Coronavirus Response Act was passed to provide sick leave and family leave due to COVID-19, together with expanded unemployment benefits and food assistance, free coronavirus testing and additional protection for health care workers.

More...

CARES Act and Stimulus Payments

As we continue to adjust to a new way of life, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was passed to provide additional support for businesses and individuals affected by COVID-19. Click on the "More" link below for a synopsis of the $2.2 trillion coronavirus stimulus and tax relief package.

More...